In the case of Pacific States Telephone and Telegraph Company v. Oregon in 1911, the Supreme Court ruled on a challenge to Oregon's system of direct legislation by citizens, known as "initiative and referendum". The plaintiff, Pacific States Telephone and Telegraph Company argued that this method was unconstitutional because it violated Article IV Section 4 of the Constitution which guarantees every state a republican form of government. They claimed that allowing citizens to directly pass laws bypassed representative democracy inherent in a republic. However, the Supreme Court dismissed their claim stating that such issues were political questions not judicial ones; hence they could not be addressed by federal courts but should be resolved through political processes within states themselves or Congress. This decision upheld citizen lawmaking as constitutional under America’s guarantee for each state to have a “republican” government.

In the dissenting opinion for Pacific States Telephone and Telegraph Company v. Oregon, Justice Harlan argued that the case was not a political question but rather one of judicial nature which required interpretation of constitutional provisions. He contended that it was within the Supreme Court's jurisdiction to decide whether state legislation violated federal law or constitution. Harlan disagreed with majority’s view that initiative and referendum system in Oregon did not violate Article IV, Section 4 of U.S Constitution (the Guarantee Clause). He believed this clause guaranteed every state a republican form of government where laws are made by representatives elected by people, not directly by citizens themselves through initiatives or referendums. Thus, he saw Oregon’s system as unconstitutional because it allowed direct democracy instead of representative democracy promised under Guarantee Clause.